On 25 April 1996 Robin Cook and Paddy Ashdown shared a bottle of whisky in a Birmingham hotel and foresaw the toxic side effects of New Labour.

Ashdown told his diary that Cook said: 'A number of us on the moderate Left of the party are becoming increasingly concerned that we are abandoning the underclass and our historic mission to work for the poor in favour of the middle class.'

Ignoring the dispossessed would be 'deadly', replied Ashdown. They would 'turn to the extreme Right'.

'That is exactly the problem,' said Cook. 'And it's the way we are going unless we are careful. There are a lot of us determined to make sure that we start mentioning the poor again.'

Cook's resistance was a huge failure. Neither he nor anyone else could prevent the Prime Minister and Chancellor converting to the dogma that meritocratic millionaires need not feel guilty about their fortunes - for if the poor had any merit they would be rich too - and providing an opening for the British National Party in the process.

The neo-Nazi successes in Burnley and Oldham were the predicted and predictable consequences of the working class losing its party.

The BNP has hoped for years that New Labour would pull it in from the fringe. Nick Griffin, its leader, surveyed the political landscape in 1999 and concluded that the BNP had a chance to become 'the focus of the hopes...of the neglected and oppressed white working class'. In the old mill towns of 2001, the BNP has, in part, become just that.

I don't want to overestimate the achievement - outside Lancashire the BNP's performance in the election was as abysmal as ever. Nor do I want to make Griffin sound like a master tactician when he's nothing more than the usual fascist mixture of the brutal and the ridiculous.

Even by the standards of the extreme Right, he's something of an extremist. He raged at David Irving when the fascist historian admitted that the Nazis had killed a few Jews (although not, for I wouldn't wish to offend the litigious Irving, in the mythical gas chambers of Auschwitz).

The modest concession was a shameful betrayal of Holocaust denial, said Griffin. 'True Revisionists will not be fooled by this new twist to the sorry tale of the Hoax of the Twentieth Century.'

Griffin's mentors are from the terrorist wing of Italian fascism. He's a supporter of Colonel Gadaffi. In the 1990s, after transient success in the East End of London, he defined the party's alleged appeal and philosophy thus: 'The electors of Millwall did not back a Post-Modernist Rightist Party, but what they perceived to be a strong, disciplined organisation with the ability to back up its slogan "Defend Rights for Whites" with well-directed boots and fists. When the crunch comes, power is the product of force and will, not of rational debate.'

Rationality certainly has no place in the BNP's account books. The party's treasurer, Michael Newland, resigned in disgust after Griffin used party funds to add an extension to his house. West Midlands fascists who complained that calling in interior designers was not the most effective way to create a new fatherland were purged.

Yet for all his hard words about boots and fists, Griffin has become a touch post-modern. He saw the gains made by Haider in Austria and the Armani-clad 'post-fascists' in Italy and decided to rebrand the party.

The policy of expelling blacks and Asians from Britain and the Hitler-worship were hidden from public view and Griffin tried to become a semi-respectable politician with broad appeal. The partial realisation of his dream tells you all you need to know about the state of British politics.

The historically-minded have been faintly disturbed by the language of a political class with a tin ear for twentieth-century history. The warning we hear so often that 'you cannot have rights without responsibilities' was minted by the Catholic, monarchist and fascist opponents of democracy in inter-war Europe.

The Third Way is an old fascist slogan - Nazism was the Third Way between Jewish capitalism and Jewish Bolshevism. Griffin himself was once a member of a group called the International Third Position and now says he is 'a moderniser'. It would be prissy to worry about disquieting linguistic echoes if other links between the mainstream and the extreme were not far stronger.

Tomorrow, Liberty, Amnesty International, Charter 88, the Bar Council, Law Society and others who have been worn out trying to record the endless assaults on civil liberties will release a calm evaluation of the condition of Britain.

Their report for the United Nations says: 'In recent months, the politicians (from the Government and opposing Conservative Party) and media alike have been encouraging racist hostility in their public attitudes towards asylum seekers.'

The slandering of refugees 'has not only led to direct attacks on asylum seekers but also an underlying hostility to all those from ethnic minority communities, and heightened racial tensions. In our view the recent race riots in Oldham and Bradford are to an extent directly linked to the above.'

I can't see how anyone can dispute that the soil for fascism has been manured by the ordure which has poured from the bowels of Westminster and Fleet Street. The attacks on asylum-seekers illustrate and exploit the large element of self-pity on the Right to perfection.

The British are a trusting and generous people. Our decency, however, has made us a 'soft touch'. Schemers and fraudsters are being smuggled into Britain by 'evil' criminal traffickers, as Tony Blair said.

They then enjoy a luxurious life courtesy of 'local councils [which] spend more money looking after bogus asylum-seekers than after old people in homes', as William Hague said.

Hardly anyone writes that it is all but impossible for the most genuine refugee in the world to reach Britain legally and that a single asylum-seeker has to manage somehow on £36.50 a week (most of which, incidentally, is paid in the new ghetto currency of Home Office vouchers).

Given the foul and mendacious climate, how can you blame the white working class of Burnley and Oldham for believing that they're being done down while aliens receive 'special privileges'? All you can charge them with is listening to their betters.

If you don't believe me or Amnesty International, or think we're overplaying a weak case, perhaps you will listen to the BNP. 'The asylum seeker issue has been great for us,' Griffin purred last year. 'This issue legitimates us.'

Legitimcay in our age depends on hating with an ingratiating simper. The older generation of fascists had the leather jackets and oily faces of child abusers at school gates. Griffin is a Cambridge graduate from a wealthy far-Right family - British fascism has always had its posh side - and has a smart-but-casual air.

Last week on Newsnight he behaved like any other media-literate politician. He wore a collar and tie. He smiled at Paxman and chummily called him 'Jeremy'. He didn't lose his temper or raise his voice and gave the general impression of being a reasonable man trying as best he could to correct the misconceptions of an arrogant presenter.

After an election campaign which saw politics and journalism sink into a stalemate of soundbites and interruptions, Elinor Goodman wrote that the set-piece political interview had become a waste of everyone's time. When the most feared interrogator in the land can't break down a Nazi fantasist, you have to admit she has a point.

For all his plausibility, I suspect that Griffin and his party will return to the obscure world of neo-Nazi faction fighting. From Oswald Mosley onwards fascism has had many brief, false dawns.

But it would be foolish to find consolation in the BNP's likely fate. The difference between the far-Left and the far-Right can be seen on the streets The SWP doesn't bomb Chelsea or wait outside Ascot racecourse to kick the living daylights out of the aristocracy. Any gain for the BNP spreads terror.

Griffin claims to be a new man who has dropped violence in much the same way as Tony Blair dropped Clause IV. He doesn't mention that as recently as 1998 he was convicted of distributing material likely to incite racial hatred.

Tony Lecomber, his deputy, was jailed for three years in 1986 for trying to plant a nail bomb which, alas, exploded in his face. He was back in the clink again in 1991 for stabbing a Jewish school teacher. A potential arsonist does not have to stare too long or too hard at the BNP before he catches the slight, approving nod.

If our leaders want to see Griffin off, they will have to rethink conventional wisdom. Racial and religious segregation in Oldham and other Pennine towns is as disgraceful as anything Northern Ireland can present.

Phil Woolas, the Labour MP for Oldham East, spoke well last week when he warned that the delusion spread by all parties that citizens are consumers will have to go if sectarianism is to be taken on. 'Parental choice' on schooling has cheery ring. In the mill towns it means that Muslim and white children never meet in the playground.

And, I'm afraid, New Labour and what's left of the Tories will be required to drop race from their repertory. It will be difficult for the poor lambs, I know. Younger politicians have hummed populist tunes to the credulous audience for their entire adult life and know no other songs. Even they must now see that applause consisting of 'well-directed boots and fists' isn't worth having.